Lazard Ltd Reports Full-Year and Fourth-Quarter 2017 Results

“We have momentum in an improving global
macroeconomic environment, and we continue to invest in our business to
serve clients, capitalize on growth opportunities and build shareholder
value.”

Record annual operating revenue

of $2.65 billion, up 13% from prior year

Record annual operating revenue in both Asset
Management, up 20%, and Financial Advisory, up 7%

Entering 2018 with record assets under management
and a vibrant M&A environment

Lazard Ltd (NYSE:LAZ) today reported record annual operating revenue1
of $2,655 million for the year ended December 31, 2017. Net income, as
adjusted1 and excluding one-time charges2, was
$501 million, or $3.78 per share (diluted) for the year. Annual net
income on a U.S. GAAP basis for the year was $254 million, or $1.91 per
share (diluted).

For the fourth quarter of 2017, net income, as adjusted1 and
excluding one-time charges2, was $148 million, or $1.12 per
share (diluted). On a U.S. GAAP basis, net loss for the fourth quarter
was $84 million, or $0.70 per share (diluted).

“Our record operating performance in 2017 underscores the strength of
our business model, the power of our franchise, and the results we are
achieving for clients,” said Kenneth M. Jacobs, Chairman and Chief
Executive Officer of Lazard. “We have momentum in an improving global
macroeconomic environment, and we continue to invest in our business to
serve clients, capitalize on growth opportunities and build shareholder
value.”

($ in millions, exceptper share data and AUM)

Year EndedDec. 31,

Quarter EndedDec. 31,

2017

2016

%’17-’16

2017

2016

%’17-’16

Net Income (loss)

US GAAP

$254

$388

(35)%

$(84)

$128

NM

Per share, diluted

$1.91

$2.92

(35)%

$(0.70)

$0.96

NM

Adjusted1,2

$501

$410

22%

$148

$150

(1)%

Per share, diluted

$3.78

$3.09

22%

$1.12

$1.13

(1)%

Operating Revenue1

Total operating revenue

$2,655

$2,344

13%

$683

$685

(0)%

Financial Advisory

$1,388

$1,301

7%

$335

$405

(17)%

Asset Management

$1,240

$1,031

20%

$339

$275

23%

AUM ($ in billions)

Period End

$249

$198

26%

Average

$227

$195

16%

$244

$200

22%

Note: Endnotes are on page 7 of this release. A reconciliation to U.S.
GAAP is on page 19.

OPERATING REVENUE

Operating revenue1 was a record $2,655 million for 2017, 13%
higher than 2016. Fourth-quarter 2017 operating revenue was $683
million, approximately even with the record fourth quarter of 2016.

Financial Advisory operating revenue was a record $1,388 million for
2017, 7% higher than 2016.

Strategic Advisory operating revenue was $1,126 million for 2017, 2%
higher than 2016.

Lazard advised or continues to advise on a number of the largest global
M&A transactions announced in 2017, including (clients are in italics): Aetna’s
$77 billion sale to CVS Health; Johnson & Johnson’s $30
billion acquisition of Actelion, with spin-out of Idorsia; Unibail-Rodamco’s
$24.7 billion acquisition of Westfield; Sempra Energy’s acquisition
of an 80% ownership interest in Oncor, valuing Oncor at $18.8 billion;
and Calpine’s $17.1 billion sale to a consortium led by Energy
Capital Partners.

Our Capital and Shareholder Advisory practices remained active globally
in 2017, advising on a breadth of public and private assignments. Our
Sovereign Advisory practice also remained active, advising governments,
sovereign and sub-sovereign entities across developed and emerging
markets.

Restructuring operating revenue was $262 million for 2017, up 30% from
2016. During or since 2017, we have been engaged in a broad range of
highly visible and complex restructuring and debt advisory assignments,
including publicly announced roles for: CGG; J.Crew; Takata; Toshiba; and
Toys “R” Us.

Fourth Quarter

Financial Advisory operating revenue was $335 million for the fourth
quarter of 2017, 17% lower than the record fourth quarter of 2016.

Strategic Advisory operating revenue was $302 million for the fourth
quarter of 2017, 18% lower than the fourth quarter of 2016.

Restructuring operating revenue was $33 million for the fourth quarter
of 2017, 8% lower than the fourth quarter of 2016.

Please see M&A transactions on which Lazard advised in the fourth
quarter, or continued to advise or completed since December 31, 2017, as
well as Capital Advisory, Sovereign Advisory and Restructuring
assignments, on pages 8 –11 of this release.

Asset Management

In the text portion of this press release, we present our Asset
Management results as 1) Management fees and other revenue, and 2)
Incentive fees.

Full Year

Asset Management operating revenue was a record $1,240 million for 2017,
20% higher than 2016.

Management fees and other revenue was a record $1,194 million for 2017,
18% higher than 2016. Incentive fees were $46 million for 2017, compared
to $16 million for 2016.

Average assets under management (AUM) for 2017 was a record $227
billion, 16% higher than 2016.

AUM as of December 31, 2017 was a record $249 billion, up 26% from
December 31, 2016. Net inflows for 2017 were $3.1 billion.

Fourth Quarter

Asset Management operating revenue was a record $339 million for the
fourth quarter of 2017, 23% higher than the fourth quarter of 2016.

Management fees and other revenue was a record $320 million for the
fourth quarter of 2017, 22% higher than the fourth quarter of 2016, and
3% higher than the third quarter of 2017. Incentive fees were $19
million for the fourth quarter of 2017, compared to $12 million for the
fourth quarter of 2016.

Average AUM for the fourth quarter of 2017 was a record $244 billion,
22% higher than the fourth quarter of 2016, and 4% higher than the third
quarter of 2017.

AUM as of December 31, 2017, increased 5% from September 30, 2017. The
sequential increase was primarily driven by market appreciation, foreign
exchange movement, and net inflows of $137 million.

OPERATING EXPENSES

Compensation and Benefits

In managing compensation and benefits expense, we focus on annual
awarded compensation (cash compensation and benefits plus deferred
incentive compensation with respect to the applicable year, net of
estimated future forfeitures and excluding charges). We believe annual
awarded compensation reflects the actual annual compensation cost more
accurately than the GAAP measure of compensation cost, which includes
applicable-year cash compensation and the amortization of deferred
incentive compensation principally attributable to previous years’
deferred compensation. We believe that by managing our business using
awarded compensation with a consistent deferral policy, we can better
manage our compensation costs, increase our flexibility in the future
and build shareholder value over time.

Adjusted compensation and benefits expense1 for 2017 was
$1,481 million, 12% higher than 2016, with a consistent deferral policy.
The corresponding adjusted compensation ratio1 was 55.8% for
2017, compared to 56.5% for 2016.

Awarded compensation expense1 for 2017 was $1,476 million,
12% higher than 2016. The corresponding awarded compensation ratio1
was 55.6% for 2017, compared to 56.2% for 2016.

We take a disciplined approach to compensation, and our goal is to
maintain a compensation-to-operating revenue ratio over the cycle in the
mid- to high-50s percentage range on both an awarded and adjusted basis,
with consistent deferral policies.

Non-Compensation Expense

Adjusted non-compensation expense1 for 2017 was $461 million,
6% higher than 2016. The ratio of non-compensation expense to operating
revenue1 was 17.4% for 2017, compared to 18.5% for 2016.

Adjusted non-compensation expense1 for the fourth quarter of
2017 was $127 million, 10% higher than the fourth quarter of 2016,
primarily reflecting increased marketing costs and investments in the
business. The ratio of non-compensation expense to operating revenue1
was 18.5% for the fourth quarter of 2017, compared to 16.8% for the
fourth quarter of 2016.

Our goal remains to achieve an adjusted non-compensation
expense-to-operating revenue ratio over the cycle of 16% to 20%.

TAXES

The provision for taxes, on an adjusted basis1, was $159
million for full-year 2017 and $28 million for the fourth quarter of
2017. The effective tax rate on the same basis was 24.1% for full-year
2017, compared to 23.7% for full-year 2016.

In the fourth quarter of 2017, as a result of the 2017 U.S. Tax Cuts and
Jobs Act, our U.S. GAAP provision for income taxes included a charge of
approximately $420 million, primarily relating to the reduction in
certain deferred tax assets, with an offsetting benefit of approximately
$203 million relating to the reduction in our Tax Receivable Agreement
(TRA) obligation.

In 2017, Lazard returned $716 million to shareholders, which included:
$341 million in dividends; $307 million in share repurchases of our
Class A common stock; and $68 million in satisfaction of employee tax
obligations in lieu of share issuances upon vesting of equity grants.

During 2017, we repurchased 7.0 million shares of our Class A common
stock for an average price of $44.10 per share. In line with our
objectives, these repurchases more than offset the potential dilution
from our 2016 year-end equity-based compensation awards (net of
estimated forfeitures and tax withholding to be paid in cash in lieu of
share issuances), which were granted at an average price of $43.42 per
share. As of January 30, 2018, our remaining share repurchase
authorization was $220 million.

On January 31, 2018, Lazard declared dividends totaling $1.71 per share,
comprised of a quarterly dividend of $0.41 per share and an extra cash
dividend of $1.30 per share, on Lazard’s outstanding Class A common
stock. The dividends are payable on February 23, 2018, to stockholders
of record on February 12, 2018.

Lazard’s financial position remains strong. As of December 31, 2017, our
cash and cash equivalents were $1,484 million, and stockholders’ equity
related to Lazard’s interests was $1,201 million.

***

CONFERENCE CALL

Lazard will host a conference call at 8:00 a.m. EST on February 1, 2018,
to discuss the company’s financial results for the full year and fourth
quarter of 2017. The conference call can be accessed via a live audio
webcast available through Lazard’s Investor Relations website at www.lazard.com,
or by dialing 1 (888) 394-8218 (U.S. and Canada) or +1 (323) 701-0225
(outside of the U.S. and Canada), 15 minutes prior to the start of the
call.

A replay of the conference call will be available by 10:00 a.m. EST on
February 1, 2018, via the Lazard Investor Relations website, or by
dialing 1 (888) 203-1112 (U.S. and Canada) or +1 (719) 457-0820 (outside
of the U.S. and Canada). The replay access code is 5950635.

ABOUT LAZARD

Lazard, one of the world's preeminent financial advisory and asset
management firms, operates from 43 cities across 27 countries in North
America, Europe, Asia, Australia, Central and South America. With
origins dating to 1848, the firm provides advice on mergers and
acquisitions, strategic matters, restructuring and capital structure,
capital raising and corporate finance, as well as asset management
services to corporations, partnerships, institutions, governments and
individuals. For more information on Lazard, please visit www.lazard.com.
Follow Lazard at @Lazard.

***

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements. In some
cases, you can identify these statements by forward-looking words such
as “may”, “might”, “will”, “should”, “could”, “would”, “expect”, “plan”,
“anticipate”, “believe”, “estimate”, “predict”, “potential”, “target,”
“goal”, or “continue”, and the negative of these terms and other
comparable terminology. These forward-looking statements, which are
subject to known and unknown risks, uncertainties and assumptions about
us, may include projections of our future financial performance based on
our growth strategies, business plans and initiatives and anticipated
trends in our business.These statements are only predictions
based on our current expectations and projections about future events.
There are important factors that could cause our actual results, level
of activity, performance or achievements to differ materially from the
results, level of activity, performance or achievements expressed or
implied by these forward-looking statements.

These factors include, but are not limited to, those discussed in our
Annual Report on Form 10-K under Item 1A “Risk Factors,” and also
discussed from time to time in our reports on Forms 10-Q and 8-K,
including the following:

A decline in general economic conditions or the global or regional
financial markets;

A decline in our revenues, for example due to a decline in overall
mergers and acquisitions (M&A) activity, our share of the M&A market
or our assets under management (AUM);

Losses caused by financial or other problems experienced by third
parties;

Losses due to unidentified or unanticipated risks;

A lack of liquidity, i.e., ready access to funds, for use in our
businesses; and

Competitive pressure on our businesses and on our ability to retain
and attract employees at current compensation levels.

Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, level of
activity, performance or achievements. Neither we nor any other person
assumes responsibility for the accuracy or completeness of any of these
forward-looking statements. You should not rely upon forward-looking
statements as predictions of future events. We are under no duty to
update any of these forward-looking statements after the date of this
release to conform our prior statements to actual results or revised
expectations and we do not intend to do so.

Lazard Ltd is committed to providing timely and accurate information
to the investing public, consistent with our legal and regulatory
obligations. To that end, Lazard and its operating companies use their
websites, Lazard’s Twitter account (twitter.com/Lazard) and other social
media sites to convey information about their businesses, including the
anticipated release of quarterly financial results, quarterly financial,
statistical and business-related information, and the posting of updates
of assets under management in various mutual funds, hedge funds and
other investment products managed by Lazard Asset Management LLC and
Lazard Frères Gestion SAS. Investors can link to Lazard and its
operating company websites through www.lazard.com.

***

ENDNOTES

1 A non-U.S. GAAP measure. See attached financial schedules
and related notes for a detailed explanation of adjustments to
corresponding U.S. GAAP results. We believe that presenting our results
on an adjusted basis, in addition to U.S. GAAP results, is the most
meaningful and useful way to compare our operating results across
periods.

2 Fourth-quarter and full-year results for 2017 were affected
primarily by the following charges:

In the fourth quarter of 2017, as a result of the 2017 U.S. Tax Cuts
and Jobs Act, our U.S. GAAP provision for income taxes included a
charge of approximately $420 million primarily relating to the
reduction in certain deferred tax assets, with an offsetting benefit
of approximately $203 million relating to the reduction in our Tax
Receivable Agreement (TRA) obligation. On a U.S. GAAP basis, these
items resulted in a net charge of $1.81 (diluted) per share in the
quarter, and $1.64 (diluted) per share for full-year 2017.

Fourth-quarter and full-year 2017 adjusted results exclude pre-tax
charges of (i) $9.9 million and $25.3 million, respectively, of costs
associated with the implementation of a new Enterprise Resource
Planning (ERP) system, and (ii) $6.8 million and $11.4 million,
respectively, of office space reorganization costs primarily relating
to incremental rent expense, lease abandonment costs and an onerous
lease provision. On a U.S. GAAP basis, these items collectively
resulted in a net charge of $10.6 million, or $0.09 (diluted) per
share, in the fourth quarter and a net charge of $23.4 million, or
$0.18 (diluted) per share, for full-year 2017.

Full-year 2017 adjusted results also exclude post-tax charges of $6.6
million of acquisition-related items, primarily reflecting changes in
fair value of contingent consideration associated with certain
business acquisitions. On a U.S. GAAP basis, this resulted in a charge
of $0.05 (diluted) per share for full-year 2017.

LAZ-EPE

FINANCIAL ADVISORY ASSIGNMENTS

Mergers and Acquisitions (Completed in the fourth
quarter of 2017)

Among the large, publicly announced M&A Advisory transactions or
assignments completed during the fourth quarter of 2017 on which Lazard
advised were the following:

Level 3 Communications on its $34 billion sale to CenturyLink

Gilead’s $11.9 billion acquisition of Kite Pharma

Paysafe’s £3.0 billion recommended sale to a consortium of
funds managed or advised by Blackstone and CVC

Express Scripts’ $3.6 billion acquisition of eviCore healthcare

Anheuser-Busch InBev’s $3.2 billion transition of its 54.5%
stake in Coca-Cola Beverages Africa to The Coca-Cola Company

Blackstone and Alliance Industries Group on the $2.0
billion sale of Alliance Automotive Group to Genuine Parts

Special Committee of the Board of Phillips Edison Grocery Center
REIT I in the company’s$1.0 billion acquisition of real
estate assets and the third party asset management business from
Phillips Edison Limited Partnership

The Rockefeller Family Trust on Rockefeller Financial Services’
formation of Rockefeller Capital Management, in partnership with
Viking Global and Gregory J. Fleming

*Transaction completed since December 31, 2017

Capital Advisory

Among the publicly announced Capital Advisory transactions or
assignments on which Lazard advised during or since the fourth quarter
of 2017 were the following:

Banca Monte dei Paschi di Siena’s precautionary
recapitalization through an €8.1 billion capital increase and €5.5
billion disposal of a bad loan portfolio with a total GBV of €26
billion

Pirelli on its €2.4 billion initial public offering

DomusVi on the syndication of a €1.0 billion term loan and €130
million revolving credit facility

Tritax Big Box REIT on its £850 million debt refinancing

Terveystalo on its €876 million initial public offering

TI Fluid Systems on its £407 million initial public offering

Via Transportation in its fund raise and strategic investment
from Daimler

Congruex on its alliance with Crestview Partners

Almaviva Santé on its refinancing

Keys Group on its debt refinancing

Sovereign Advisory

Among the publicly announced Sovereign Advisory assignments on which
Lazard advised during or since the fourth quarter of 2017 were the
following:

The OJSC International Bank of Azerbaijan

Southern Gas Corridor CJSC of Azerbaijan

Altiplano (Bolivia)

The Democratic Republic of the Congo

The Republic of the Congo

The Republic of Croatia

Compania Nacional de Telecomunicacion (The Republic of Ecuador)

Refineria del Pacifico (The Republic of Ecuador)

The Federal Democratic Republic of Ethiopia

The Gabonese Republic

Sotrader (joint venture between the government of Gabon and Olam
International)

The Hellenic Republic

The Hashemite Kingdom of Jordan

airBaltic (majority owned by the government of Latvia)

SNIM (The Islamic Republic of Mauritania)

The Republic of Mozambique

Nama Holding (Oman)

Oman Oil

The Republic of Serbia

Ukraine and certain sub-sovereign entities

NJSC Naftogaz of Ukraine

The Republic of Zimbabwe

Restructuring and Debt Advisory Assignments

Restructuring and debtor or creditor advisory assignments completed
during the fourth quarter of 2017 on which Lazard advised include: SunEdison
in connection with its Chapter 11 bankruptcy restructuring; and Sorgenia
and Odebrecht Oil & Gas in connection with their debt
restructurings.

Notable ongoing restructuring and debtor or creditor advisory
assignments on which Lazard advised during or since the fourth quarter
of 2017 include: Breitburn Energy Partners, CGG,Expro Group,
GST Autoleather, Seadrill, Takata, and Toys “R” Us in
connection with their Chapter 11 or similar bankruptcy restructurings; Nine
West in connection with its debt restructuring; lenders to Danaos
on the company’s restructuring; Toshiba in connection with the
restructuring of its Westinghouse subsidiary; Quality Care Properties
on strategic options in relation to HCR ManorCare; and Claire’s Stores
on capital structure alternatives.

***

LAZARD LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(U.S. GAAP)

Three Months Ended

% Change From

December 31,

September 30,

December 31,

September 30,

December 31,

($ in thousands, except per share data)

2017

2017

2016

2017

2016

Total revenue

$692,332

$638,131

$705,803

8%

(2%)

Interest expense

($13,524)

(13,272)

(14,238)

Net revenue

678,808

624,859

691,565

9%

(2%)

Operating expenses:

Compensation and benefits

374,673

361,787

381,267

4%

(2%)

Occupancy and equipment

37,374

29,156

28,162

Marketing and business development

25,628

19,798

22,710

Technology and information services

34,242

31,373

26,055

Professional services

14,231

11,005

13,635

Fund administration and outsourced services

18,729

18,325

16,994

Amortization and other acquisition-related costs

4,511

172

33,410

Other

13,430

9,031

12,476

Subtotal

148,145

118,860

153,442

25%

(3%)

Benefit pursuant to tax receivable agreement

(202,546)

-

-

Operating expenses

320,272

480,647

534,709

(33%)

(40%)

Operating income

358,536

144,212

156,856

NM

NM

Provision for income taxes

441,490

32,742

27,869

NM

NM

Net income (loss)

(82,954)

111,470

128,987

NM

NM

Net income attributable to noncontrolling interests

604

2,260

1,005

Net income (loss) attributable to Lazard Ltd

($83,558)

$109,210

$127,982

NM

NM

Attributable to Lazard Ltd Common Stockholders:

Weighted average shares outstanding:

Basic

119,866,860

121,243,598

123,170,333

(1%)

(3%)

Diluted

119,866,860

132,393,664

132,980,861

(9%)

(10%)

Net income (loss) per share:

Basic

($0.70)

$0.90

$1.04

NM

NM

Diluted

($0.70)

$0.82

$0.96

NM

NM

LAZARD LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(U.S. GAAP)

Year Ended

December 31,

December 31,

($ in thousands, except per share data)

2017

2016

% Change

Total revenue

$2,697,829

$2,383,663

13%

Interest expense

(53,518)

(50,292)

Net revenue

2,644,311

2,333,371

13%

Operating expenses:

Compensation and benefits

1,512,873

1,340,543

13%

Occupancy and equipment

124,842

109,305

Marketing and business development

89,205

83,202

Technology and information services

121,671

97,461

Professional services

47,932

45,512

Fund administration and outsourced services

71,305

63,421

Amortization and other acquisition-related costs

9,514

35,247

Other

44,069

41,219

Subtotal

508,538

475,367

7%

Benefit pursuant to tax receivable agreement

(202,546)

-

Operating expenses

1,818,865

1,815,910

0%

Operating income

825,446

517,461

60%

Provision for income taxes

565,599

123,769

NM

Net income

259,847

393,692

(34%)

Net income attributable to noncontrolling interests

6,264

5,994

Net income attributable to Lazard Ltd

$253,583

$387,698

(35%)

Attributable to Lazard Ltd Common Stockholders:

Weighted average shares outstanding:

Basic

121,573,442

124,770,401

(3%)

Diluted

132,479,728

132,633,630

(0%)

Net income per share:

Basic

$2.09

$3.11

(33%)

Diluted

$1.91

$2.92

(35%)

LAZARD LTD

UNAUDITED CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL CONDITION

(U.S. GAAP)

December 31,

December 31,

($ in thousands)

2017

2016

ASSETS

Cash and cash equivalents

$1,483,836

$1,158,785

Deposits with banks and short-term investments

935,431

419,668

Cash deposited with clearing organizations and other segregated cash

35,539

29,030

Receivables

571,616

638,282

Investments

427,186

459,422

Goodwill and other intangible assets

391,364

382,024

Deferred tax assets

648,293

1,075,777

Other assets

433,444

393,520

Total Assets

$4,926,709

$4,556,508

LIABILITIES & STOCKHOLDERS' EQUITY

Liabilities

Deposits and other customer payables

$992,338

$472,283

Accrued compensation and benefits

593,781

541,588

Senior debt

1,190,383

1,188,600

Tax receivable agreement obligation

310,275

513,610

Other liabilities

579,759

546,614

Total liabilities

3,666,536

3,262,695

Commitments and contingencies

Stockholders' equity

Preferred stock, par value $.01 per share

-

-

Common stock, par value $.01 per share

1,298

1,298

Additional paid-in capital

789,452

688,231

Retained earnings

1,080,413

1,134,186

Accumulated other comprehensive loss, net of tax

(232,562)

(314,222)

Subtotal

1,638,601

1,509,493

Class A common stock held by subsidiaries, at cost

(437,530)

(273,506)

Total Lazard Ltd stockholders' equity

1,201,071

1,235,987

Noncontrolling interests

59,102

57,826

Total stockholders' equity

1,260,173

1,293,813

Total liabilities and stockholders' equity

$4,926,709

$4,556,508

LAZARD LTD

SELECTED SUMMARY FINANCIAL INFORMATION (a)

(Non-GAAP - unaudited)

Three Months Ended

% Change From

December 31,

September 30,

December 31,

September 30,

December 31,

($ in thousands, except per share data)

2017

2017

2016

2017

2016

Revenues:

Financial Advisory

$335,098

$305,890

$404,577

10%

(17%)

Asset Management

338,967

315,470

275,365

7%

23%

Corporate

8,555

5,965

5,256

43%

63%

Operating revenue (b)

$682,620

$627,325

$685,198

9%

(0%)

Expenses:

Adjusted compensation and benefits expense (c)

$366,927

$354,439

$375,865

4%

(2%)

Ratio of adjusted compensation to operating revenue

53.8%

56.5%

54.9%

Non-compensation expense (d)

$126,590

$110,507

$115,125

15%

10%

Ratio of non-compensation to operating revenue

18.5%

17.6%

16.8%

Earnings:

Earnings from operations (e)

$189,103

$162,379

$194,208

16%

(3%)

Operating margin (f)

27.7%

25.9%

28.3%

Adjusted net income (g)

$148,107

$112,433

$149,981

32%

(1%)

Diluted adjusted net income per share

$1.12

$0.85

$1.13

32%

(1%)

Diluted weighted average shares

132,696,257

132,393,664

132,980,861

0%

(0%)

Effective tax rate (h)

15.9%

24.6%

17.1%

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for the corresponding U.S. GAAP measures, and should be
read only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation of
the adjustments made to the corresponding U.S. GAAP measures, see
Reconciliation of U.S. GAAP to Selected Summary Financial
Information and Notes to Financial Schedules.

LAZARD LTD

SELECTED SUMMARY FINANCIAL INFORMATION (a)

(Non-GAAP - unaudited)

Year Ended

December 31,

December 31,

($ in thousands, except per share data)

2017

2016

% Change

Revenues:

Financial Advisory

1,387,682

1,301,048

7%

Asset Management

1,239,661

1,030,711

20%

Corporate

27,197

12,580

NM

Operating revenue (b)

$2,654,540

$2,344,339

13%

Expenses:

Adjusted compensation and benefits expense (c)

$1,481,062

$1,325,325

12%

Ratio of adjusted compensation to operating revenue

55.8%

56.5%

Non-compensation expense (d)

$460,678

$433,713

6%

Ratio of non-compensation to operating revenue

17.4%

18.5%

Earnings:

Earnings from operations (e)

$712,800

$585,301

22%

Operating margin (f)

26.8%

25.0%

Adjusted net income (g)

$500,521

$409,697

22%

Diluted adjusted net income per share

$3.78

$3.09

22%

Diluted weighted average shares

132,479,728

132,633,630

(0%)

Effective tax rate (h)

24.1%

23.7%

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for the corresponding U.S. GAAP measures, and should be
read only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation of
the adjustments made to the corresponding U.S. GAAP measures, see
Reconciliation of U.S. GAAP to Selected Summary Financial
Information and Notes to Financial Schedules.

LAZARD LTD

COMPENSATION AND BENEFITS - ANALYSIS

(unaudited)

($ in millions except share price)

2010

2011

2012

2013

2014

2015

2016

2017

ADJUSTED U.S. GAAP BASIS (c)

Base salary

$303.4

$344.2

$353.2

$339.3

$354.0

$355.8

$372.7

$404.9

Benefits and other

149.5

162.2

162.6

191.2

215.6

228.3

201.9

243.4

Cash incentive compensation

472.8

372.4

367.2

368.5

432.9

413.9

398.3

465.5

Total cash compensation, benefits and other

925.7

878.8

883.0

899.0

1,002.5

998.0

972.9

1,113.8

Amortization of deferred incentive awards

240.5

289.4

334.8

297.6

299.2

320.8

352.4

367.3

Compensation and benefits - Adjusted U.S. GAAP basis (i)

$1,166.2

$1,168.2

$1,217.8

$1,196.6

$1,301.7

$1,318.8

$1,325.3

$1,481.1

% of Operating Revenue

58.9%

62.0%

61.8%

58.8%

55.6%

55.4%

56.5%

55.8%

AWARDED BASIS

Total cash compensation and benefits (per above)

$925.7

$878.8

$883.0

$899.0

$1,002.5

$998.0

$972.9

$1,113.8

Deferred year-end incentive awards

292.7

282.4

272.4

291.0

325.2

336.1

342.4

351.0

Compensation and benefits before sign-on and other

special deferred incentive awards

1,218.4

1,161.2

1,155.4

1,190.0

1,327.7

1,334.1

1,315.3

1,464.8

Sign-on and other special deferred incentive awards (j)

27.3

40.0

42.1

22.1

14.2

26.4

29.9

36.2

Total Compensation and benefits - Notional

1,245.7

1,201.2

1,197.5

1,212.1

1,341.9

1,360.5

1,345.2

1,501.0

Adjustment for actual/estimated forfeitures (k)

(27.8)

(28.0)

(27.4)

(27.3)

(25.4)

(27.2)

(27.9)

(25.3)

Compensation and benefits - Awarded (l)

$1,217.9

$1,173.2

$1,170.1

$1,184.8

$1,316.5

$1,333.3

$1,317.3

$1,475.7

% of Operating Revenue - Awarded Basis(l)

61.6%

62.3%

59.4%

58.2%

56.3%

56.0%

56.2%

55.6%

Memo:

Total value of deferred equity-based year end

incentive awards

$261.4

$192.7

$183.3

$180.9

$219.0

$267.7

$234.8

TBD

Equity-based year end awards - share equivalents ('000)

5,775

6,932

4,929

4,146

4,329

7,778

5,395

TBD

Price at issuance

$45.26

$27.80

$37.19

$43.62

$50.60

$34.42

$43.43

TBD

Deferred compensation awards ratio (m)

24.0%

24.3%

23.6%

24.5%

24.5%

25.2%

26.0%

24.0%

Operating revenue

$1,978.5

$1,883.9

$1,970.8

$2,034.3

$2,340.2

$2,380.1

$2,344.3

$2,654.5

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for comparable U.S. GAAP measures, and should be read
only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation of
the adjustments made to comparable U.S. GAAP measures, see
Reconciliation of U.S. GAAP to Adjusted Statement of Operations and
Notes to Financial Schedules.

LAZARD LTD

ASSETS UNDER MANAGEMENT ("AUM")

(unaudited)

($ in millions)

As of

Variance

December 31,

September 30,

December 31,

2017

2017

2016

Qtr to Qtr

YTD

Equity:

Emerging Markets

$52,349

$49,548

$41,363

5.7%

26.6%

Global

43,663

40,505

30,567

7.8%

42.8%

Local

42,650

40,761

36,243

4.6%

17.7%

Multi-Regional

70,696

67,707

54,668

4.4%

29.3%

Total Equity

209,358

198,521

162,841

5.5%

28.6%

Fixed Income:

Emerging Markets

17,320

17,243

15,580

0.4%

11.2%

Global

4,109

4,213

3,483

(2.5%)

18.0%

Local

4,497

4,447

4,245

1.1%

5.9%

Multi-Regional

9,154

9,134

7,847

0.2%

16.7%

Total Fixed Income

35,080

35,037

31,155

0.1%

12.6%

Alternative Investments

2,846

2,668

2,422

6.7%

17.5%

Private Equity

1,478

1,475

1,253

0.2%

18.0%

Cash Management

697

424

239

64.4%

191.6%

Total AUM

$249,459

$238,125

$197,910

4.8%

26.0%

Three Months Ended December 31,

Year Ended December 31,

2017

2016

2017

2016

AUM - Beginning of Period

$238,125

$205,440

$197,910

$186,380

Net Flows

137

(2,705)

3,090

160

Market and foreign exchange

appreciation (depreciation)

11,197

(4,825)

48,459

11,370

AUM - End of Period

$249,459

$197,910

$249,459

$197,910

Average AUM

$243,815

$200,454

$226,525

$194,808

% Change in average AUM

21.6%

16.3%

Note: Average AUM generally represents the average of the monthly
ending AUM balances for the period.

LAZARD LTD

RECONCILIATION OF U.S. GAAP TO SELECTED SUMMARY FINANCIAL
INFORMATION (a)

(unaudited)

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

December 31,

($ in thousands, except per share data)

2017

2017

2016

2017

2016

Operating Revenue

Net revenue - U.S. GAAP Basis

$678,808

$624,859

$691,565

$2,644,311

$2,333,371

Adjustments:

Revenue related to noncontrolling interests (n)

(3,149)

(5,039)

(8,343)

(16,228)

(20,614)

(Gains) losses related to Lazard Fund Interests ("LFI") and other
similar arrangements

(5,545)

(4,875)

1,389

(23,526)

(3,318)

MBA Lazard acquisition adjustment (o)

-

-

(12,668)

-

(12,668)

Interest expense

12,506

12,380

13,255

49,983

47,568

Operating revenue, as adjusted (b)

$682,620

$627,325

$685,198

$2,654,540

$2,344,339

Compensation and Benefits Expense

Compensation and benefits expense - U.S. GAAP Basis

$374,673

$361,787

$381,267

$1,512,873

$1,340,543

Adjustments:

(Charges) credits pertaining to LFI and other similar arrangements

(5,545)

(4,875)

1,389

(23,526)

(3,318)

Compensation related to noncontrolling interests (n)

(2,201)

(2,473)

(6,791)

(8,285)

(11,900)

Compensation and benefits expense, as adjusted (c)

$366,927

$354,439

$375,865

$1,481,062

$1,325,325

Non-Compensation Expense

Non-compensation expense - Subtotal - U.S. GAAP Basis

$148,145

$118,860

$153,442

$508,538

$475,367

Adjustments:

Expenses associated with ERP system implementation (p)

(9,917)

(6,530)

-

(25,308)

-

Expenses related to office space reorganization (q)

(6,781)

(1,412)

-

(11,354)

-

Charges pertaining to Senior Debt refinancing (r)

-

-

(3,148)

-

(3,148)

Amortization and other acquisition-related costs (s)

(4,511)

(172)

(34,777)

(9,514)

(36,614)

Non-compensation expense related to noncontrolling interests (n)

(346)

(239)

(392)

(1,684)

(1,892)

Non-compensation expense, as adjusted (d)

$126,590

$110,507

$115,125

$460,678

$433,713

Pre-Tax Income and Earnings From Operations

Operating Income - U.S. GAAP Basis

$358,536

$144,212

$156,856

$825,446

$517,461

Adjustments:

Reduction of tax receivable agreement obligation ("TRA") (t)

(202,546)

-

-

(202,546)

-

Expenses associated with ERP system implementation (p)

9,917

6,530

-

25,308

-

Expenses related to office space reorganization (q)

6,781

1,412

-

11,354

-

Charges pertaining to Senior Debt refinancing (r)

-

-

3,747

-

3,747

MBA Lazard acquisition adjustment (o)

-

-

(12,668)

-

(12,668)

Acquisition-related costs (benefits) (s)

4,012

(612)

34,092

6,580

34,092

Net income related to noncontrolling interests (n)

(603)

(2,330)

(1,005)

(6,264)

(5,994)

Pre-tax income, as adjusted

176,097

149,212

181,022

659,878

536,638

Interest expense

12,506

12,380

12,501

49,983

46,796

Amortization (LAZ only)

500

787

685

2,939

1,867

Earnings from operations, as adjusted (e)

$189,103

$162,379

$194,208

$712,800

$585,301

Net Income (loss) attributable to Lazard Ltd

Net income (loss) attributable to Lazard Ltd - U.S. GAAP Basis

($83,558)

$109,210

$127,982

$253,583

$387,698

Adjustments:

Reduction of deferred tax assets (net of TRA reduction) (t)

216,928

-

-

216,928

-

Expenses associated with ERP system implementation (p)

9,917

6,530

-

25,308

-

Expenses related to office space reorganization (q)

6,781

1,412

-

11,354

-

Charges pertaining to Senior Debt refinancing (r)

-

-

3,747

-

3,747

MBA Lazard acquisition adjustment (o)

-

-

(12,668)

-

(12,668)

Acquisition-related costs (benefits) (s)

4,012

(612)

34,092

6,580

34,092

Valuation Allowance for changed tax laws (u)

-

-

12,347

-

12,347

Tax benefit allocated to adjustments

(5,973)

(4,107)

(15,519)

(13,232)

(15,519)

Net income, as adjusted (g)

$148,107

$112,433

$149,981

$500,521

$409,697

Diluted net income (loss) per share:

U.S. GAAP Basis

($0.70)

$0.82

$0.96

$1.91

$2.92

Non-GAAP Basis, as adjusted

$1.12

$0.85

$1.13

$3.78

$3.09

This presentation includes non-U.S. GAAP ("non-GAAP") measures. Our
non-GAAP measures are not meant to be considered in isolation or as
a substitute for comparable U.S. GAAP measures, and should be read
only in conjunction with our consolidated financial statements
prepared in accordance with U.S. GAAP. For a detailed explanation of
the adjustments made to comparable U.S. GAAP measures, see Notes to
Financial Schedules.

LAZARD LTD

Notes to Financial Schedules

(a)

Selected Summary Financial Information are non-U.S. GAAP
("non-GAAP") measures. Lazard believes that presenting results and
measures on an adjusted basis in conjunction with U.S. GAAP measures
provides the most meaningful basis for comparison of its operating
results across periods.

(b)

A non-GAAP measure which excludes (i) revenue related to
non-controlling interests (see (n) below), (ii) (gains)/losses
related to the changes in the fair value of investments held in
connection with Lazard Fund Interests and other similar deferred
compensation arrangements for which a corresponding equal amount is
excluded from compensation & benefits expense, (iii) for the three
and twelve month periods ended December 31, 2016, a gain relating to
the Company's acquisition of MBA Lazard (see (o) below), (iv)
interest expense primarily related to corporate financing
activities, and (v) for the three and twelve month periods ended
December 31, 2016, excess interest expense pertaining to Senior Debt
refinancing (see (r) below).

(c)

A non-GAAP measure which excludes (i) (charges)/credits related to
the changes in the fair value of the compensation liability recorded
in connection with Lazard Fund Interests and other similar deferred
compensation arrangements, and (ii) compensation and benefits
related to noncontrolling interests (see (n) below).

(d)

A non-GAAP measure which excludes (i) for the three and twelve month
periods ended December 31, 2017 and for the three month period ended
September 30, 2017, expenses associated with ERP system
implementation (see (p) below), (ii) for the three and twelve month
periods ended December 31, 2017 and for the three month period ended
September 30, 2017, expenses related to office space reorganization
(see (q) below), (iii) for the three and twelve month periods ended
December 31, 2016, charges pertaining to Senior Debt refinancing
(see (r) below), (iv) amortization and other acquisition-related
costs (see (s) below), and (v) expenses related to noncontrolling
interests (see (n) below).

(e)

A non-GAAP measure which excludes (i) for the three and twelve month
periods ended December 31, 2017, a benefit relating to the reduction
in our Tax Receivable Agreement obligation (see (t) below), (ii) for
the three and twelve month periods ended December 31, 2017 and for
the three month period ended September 30, 2017, expenses associated
with ERP system implementation (see (p) below), (iii) for the three
and twelve month periods ended December 31, 2017 and for the three
month period ended September 30, 2017, expenses related to office
space reorganization (see (q) below), (iv) for the three and twelve
month periods ending December 31, 2016, charges pertaining to Senior
Debt refinancing (see (r) below), (v) for the three and twelve month
periods ended December 31, 2016, a gain relating to the Company's
acquisition of MBA Lazard (see (o) below), (vi) amortization and
other acquisition-related costs (benefits) (see (s) below), (vii)
net revenue and expenses related to noncontrolling interests (see
(n) below), and (viii) interest expense primarily related to
corporate financing activities.

(f)

Represents earnings from operations as a percentage of operating
revenue, and is a non-GAAP measure.

(g)

A non-GAAP measure which excludes (i) for the three and twelve month
periods ended December 31, 2017, a charge primarily relating to the
reduction in certain deferred tax assets with an offsetting benefit
relating to the reduction in our Tax Receivable Agreement obligation
(see (t) below), (ii) for the three and twelve month periods ended
December 31, 2017 and for the three month period ended September 30,
2017, expenses associated with ERP system implementation (see (p)
below), (iii) for the three and twelve month periods ended December
31, 2017 and for the three month period ended September 30, 2017,
expenses related to office space reorganization (see (q) below),
(iv) for the three and twelve month periods ended December 31, 2016,
charges pertaining ot Senior Debt refinanicng, net of tax benefits
(see (r) below), (v) for the three and twelve month periods ended
December 31, 2016, a gain relating to the Company's acquisition of
MBA Lazard (see (o) below), (vi) amortization and other
acquisition-related costs, net of tax benefits (see (s) below), and
(vii) for the three and twelve month periods ended December 31,
2016, valuation allowance on state UBT credit (see (u) below).

(h)

Effective tax rate is a non-GAAP measure based upon the U.S. GAAP
rate with adjustments for the tax applicable to the non-GAAP
adjustments to operating income, generally based upon the effective
marginal tax rate in the applicable jurisdiction of the adjustments.
The computation is based on a quotient, the numerator of which is
the provision for income taxes of $27,990, $36,779 and $31,041 for
the three month periods ended December 31, 2017, September 30, 2017,
and December 31, 2016, respectively, $159,357 and $126,941 for the
twelve month periods ended December 31, 2017 and 2016, respectively,
and the denominator of which is pre-tax income of $176,097, $149,212
and $181,022 for the three month periods ended December 31, 2017,
September 30, 2017 and December 31, 2016, respectively, $659,878 and
$536,638 for the twelve month periods ended December 31, 2017 and
2016, respectively. The three and twelve month periods ended
December 31, 2017, exclude a charge relating to the reduction of
deferred tax assets (see (t) below). The three and twelve month
periods ended December 31, 2016, excludes valuation allowance for
changed tax laws (see (u) below).

(i)

A reconciliation of U.S. GAAP compensation and benefits expense to
compensation and benefits expense, as adjusted:

Year Ended December 31,

($ in thousands)

2010

2011

2012

2013

2014

2015

2016

2017

Compensation & benefits expense - U.S. GAAP Basis

$1,194,168

$1,168,945

$1,351,129

$1,278,534

$1,313,606

$1,319,746

$1,340,543

$1,512,873

Adjustments:

Charges pertaining to cost saving initiatives

-

-

(99,987)

(51,399)

-

-

-

-

Charges pertaining to staff reductions

-

-

(21,754)

-

-

-

-

-

(Charges) credits pertaining to LFI and other similar arrangements
comp. liability

Special deferred incentive awards are granted outside the year end
compensation process and include grants to new hires, retention
awards, and performance units earned under PRSU grants.

(k)

Under U.S. GAAP, an estimate is made for future forfeitures of the
deferred portion of such awards. This estimate is based on both
historical experience and future expectations. The result reflects
the cost associated with awards that are expected to vest. This
calculation is undertaken in order to present awarded compensation
on a similar basis to GAAP compensation. Amounts for 2010-2013
represent actual forfeiture experience. The 2014-2017 amounts
represent estimated forfeitures.

(l)

Awarded Compensation and Benefits has been restated to eliminate the
year-end foreign exchange adjustment to better align awarded
compensation with revenue. The impact of the change is not material.

In 2016 The Company incurred charges related to the extinguishment
of $98 million of the 6.85% Senior Notes maturing in June 2017 and
the issuance of $300 million of 3.625% notes maturing in March 2027.
The charges include a pre-tax loss on the extinguishment of $3.1
million and excess interest expense of $0.6 million (due to the
delay between the issuance of the 2027 notes and the settlement of
the 2017 notes).

(s)

Represents the change in fair value of the contingent consideration
associated with certain business acquisitions.

(t)

In 2017, as a result of the 2017 US Tax Cuts and Jobs Act, the
Company incurred a charge of approximately $420 million primarily
relating to the reduction in certain deferred tax assets, with an
offsetting benefit of approximately $203 million relating to the
reduction in our Tax Receivable Agreement obligation.

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